Photon Energy raises dispute with Czech Republic over PV project policy changes

In response to recent government policy shifts, Photon Energy, alongside other investors, has issued a formal notice of dispute against the Czech Republic. The company alleges that proposed reductions in state support for photovoltaic (PV) projects violate international agreements, including the Energy Charter Treaty (ECT) and a bilateral investment treaty (BIT) with the Slovak Federal Republic and Switzerland.

The notice claims that the Czech Republic’s proposed policy changes, which target the structure and duration of state support for renewable energy projects, contradict commitments made under these treaties. Photon Energy argues that these actions infringe on the ECT’s guarantees for fair treatment of investments and prohibitions against expropriation.

Between 2005 and 2013, the Czech Republic introduced a subsidy program to support PV projects, promising predictable returns through feed-in tariffs or subsidies aligned with market electricity prices. The Czech government guaranteed this support for 20 years for PV plants commissioned between 2009 and 2010. However, recent policy changes include reduced levels of support, stricter regulations on excess return rates, and a removal of support when electricity prices fall into negative territory.

“These measures will deprive investors of expected benefits and severely impact the profitability of their PV projects,” said Photon Energy. The company insists that such abrupt policy shifts undermine investor confidence and disregard the Czech Republic’s obligations to uphold fair and stable investment conditions.

Photon Energy and its co-investors have requested a response from the Czech government to indicate whether it is open to settling the dispute amicably. If not, Photon and its partners intend to seek compensation for anticipated financial losses resulting from these new measures.

Source: Photon Energy and ISBnews